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Winter blues

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I think I may be suffering the early onset of SAD (seasonally adjusted disorder). Even though the Australian winter only started at the beginning of June, I am already feeling the cold and the despondency. My condition is not helped by the knowledge we don’t have another public holiday until early November. Or maybe it’s a symptom of the current national mood, which suggests that although we are highly likely to vote for a change of government in the forthcoming federal election, we don’t exactly relish the prospect.

According to the latest opinion poll, most of us would actually prefer to see a former leader of both the two main political parties lead their respective sides into the election, rather than the present incumbents. Given our compulsory voting law, the preferential voting methodology, and the parliamentary system for choosing party leaders, the electorate is basically denied the opportunity to vote for its preferred Prime Ministerial candidate.

The general election campaign is taking place against the backdrop of an extraordinary period of critical self-analysis about the type of society we live in. For various reasons, our politicians, the media and the chattering classes have been debating the notion of whether or not Australia is a classless society, a racist society, or a sexist society. (To which questions the answer would probably be: “Possibly, but not all the time, and not everywhere.”)

Much of the surface debate has been prompted by behaviour and language generally deemed offensive, and by arguments about whether people actually meant (or understood) what they said or did, whether they appreciated the impact of their deeds, or whether they simply didn’t know any better. While everyone should be held accountable for their individual behaviour, this is not just about semantics, or different moral standards or conflicting social attitudes; after all, Australia is ostensibly an egalitarian, pluralistic and secular country, founded on the notion of “a fair go for all”.

I think this national malaise stems from a collective failure of leadership, which in turn leads to disrespect for our leaders and disregard for the institutions they represent. This failure of leadership is especially acute among institutions that were primarily designed to promote, serve, protect and cater to the interests of the working population. Too often in recent years have leaders, office holders and key figures within political parties, trade unions, religious orders, the armed forces, the media and even major sporting codes been found wanting in upholding a culture of robust ethical behaviour and acceptable moral standards. Quite rightly, people feel angry, demoralised and almost disenfranchised because they have been let down by the very establishments they believe were designed to be there to support and represent them.

It’s not surprising, therefore, that much of the population is tuning out of the election debate (such as it is) because they have little faith in our political leaders in particular, and in public institutions as a whole. Cynicism, even despair, prevails. Hence the mid-winter chill….

Corporate Governance – exercising a “duty of awareness” in the age of social media

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Do we need a new theory of Corporate Governance? Is it time to look at a new model that reflects the current environment in which businesses operate, an era characterised by:

  • social media,
  • corporate and social responsibility,
  • shareholder and consumer activism,
  • increased market connectivity, and
  • rapid generational change?

Has the law fallen behind in being able to regulate and oversee contemporary corporate behaviour – where compliance with and adherence to the letter of the law may no longer be enough to meet community standards or satisfy shareholder expectations?

The question arose during a roundtable discussion I attended recently, comprising non-executive directors, entrepreneurs, corporate advisers and governance experts. Some of the issues we kicked around included:

  • the efficacy of running more frequent board interaction via the use of technology (as opposed to the standard face-to-face monthly board meeting);
  • the ethics of minimising cross-border taxation by multinational companies (even though it may be legal under international tax law);
  • the imperative to develop more inclusive and diversified boards (including networking into broader stakeholder groups);
  • the perils of ill-considered public comments made by CEOs (and the resulting social media backlash); and
  • the risk of harking back to some “golden age” of corporate behaviour (assuming such an era actually existed)

Our current perspectives on Corporate Governance largely derive from the late 1980s and early 1990s when a series of authoritative studies and reports led to new Codes of Practice and updated corporations laws – I’m referring to the work done by and in the name of Tricker, Carver, Monks, Cadbury, Greenbury, Hilmer and Hempel. And while in recent years we have seen increased scrutiny on CSR, directors’ remuneration and financial oversight by boards (plus Sarbanes-Oxley, Dodd-Frank and IFRS), the reality is that most of the earlier Corporate Governance reforms were introduced just as the internet went public and just as financial markets were being deregulated. So it could be argued that the reforms were ill-equipped for, or could not have anticipated, the changes to come – witness for example, the SEC’s recent approval of social media as an appropriate platform for corporate disclosure.

In Australia, Corporate Governance is described simply as “good decisions being made by the right person”, and the obligations of company directors are summarised as follows:

  • your primary duty is to the shareholders;
  • you must act with appropriate due care and diligence;
  • you must not allow the company to trade while insolvent;
  • you must exercise your powers in good faith and in the best interests of the company;
  • you must not improperly use your position of (or information obtained as) a director to benefit yourself or another person, or to cause detriment to the company.

On one level, the test of whether an organization has exercised good judgement in making a decision is, “would you be embarrassed if this was reported on the front page of tomorrow’s newspaper?” At another, Corporate Governance is reduced to a compliance checklist of risk mitigation measures.

The Australian courts (in the OneTel and Centro cases) have expanded and reinforced the duty of care (particularly in relation to the business judgement rule) to place greater accountability on individual directors to consider what a reasonable person would do in exercising their duty of care and diligence:

  • To understand the fundamentals of the business
  • To keep themselves informed of the company’s activities
  • To monitor the company’s activities (e.g., through active questioning)

The question we should be addressing is: “Does imposing a broad duty of care and specific fiduciary obligations ensure an appropriate level of Corporate Governance?” I would argue that in light of a rapidly changing operating environment, we would be well-advised to exercise a “duty of awareness” in respect of our Corporate Governance standards. In my view, directors need to take a wider perspective in understanding and monitoring the business fundamentals and the company’s activities. Some may argue that this is not a new duty, it has simply been forgotten in recent times – and in the era of social media, when it is far easier to “get caught out”, it would be prudent to have more regard for the broader context.

A “duty of awareness” offers an appropriate counter-balance to the numerous areas of self-regulation by industry sectors and by individual companies. It provides an objective test for assessing “if not, why not” explanations required under both voluntary and mandatory Codes of Practice – i.e., did the respondent take into account all relevant factors, and did the respondent adopt a sufficient level of awareness in evaluating its options under a chosen course of action?

The “duty of awareness” means that at an individual level, directors would be obliged to reflect on their contribution to and participation in board decisions; boards would need to consider the likely impact of their decisions on the company’s performance and on wider stakeholders; and companies would be expected to have regard to their standing as a good corporate citizen, not merely a compliant one.

Acknowledgements: I am grateful to Andrew Donovan of Thoughtpost Governance and Dale Simpson of Bravo Consulting Group for their invaluable contributions to this article.

Audiobus – a case study in app collaboration

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An elegant solution for audio app management

Like many leading CEOs and successful business people, I think it’s essential for all of us to have a creative outlet or a hobby, something that is not directly connected to our working lives.

For my part, I like to compose and record music using iOS apps, under an assumed nom de musique. Several of my compositions have been broadcast on national radio, and occasionally listeners are kind enough to purchase and download the music from my artist website.

In exploring this newer form of music-making, I am fortunate enough to gain access to pre-release and beta versions of new apps, which allows me to provide constructive feedback on new designs and recommend suggested features. This activity also provides some insights on best practice for collaborative app development:

  • Listen to your customers and their needs
  • Listen to your customers’ suppliers and their problems
  • Create a common technical standard (not the same as an open standard)
  • Encourage early adoption by making the standard available to key suppliers
  • Embark on an engaging programme of pre-release marketing via social media
  • Underpromise and over-deliver (but always deliver what you promised, and on time)
  • Repeat the process ad infinitum

There is a very active community of iOS musicians. This community is a thriving cottage industry: most practitioners are non-professionals; some are working on the fringes of the music industry; and a few are well-known software developers, producers and commercial recording artists in their own right. It’s a supportive community, and one where it’s easy to find your own level. It also tends to be a highly collaborative environment, with most participants willing to share their knowledge and provide help and advice. There are dedicated micromusic blogs, helpful product review sites and supportive technical forums.

Which brings me to Audiobus, one of the more interesting new apps that is gaining a lot of attention from developers, users and reviewers alike.

Music apps can be divided into 3 broad categories:

The problem is that most of these apps were not designed to “talk” to one another. Initially, it was possible to connect some apps using MIDI tools, but for many amateurs, this is probably a technical stretch. Besides, in the real world, I can plug a guitar and a keyboard into the same amplifier, or connect them to my desktop recording software via a single interface, easily enough.

Unfortunately, real-time audio generated in one app could not be connected to another app. Audio recordings could only be shared across multiple apps using some tedious save/copy/paste functions, or long-winded export and import processes. Audiobus solves this problem with an elegant design solution that works so simply, you have to wonder why Apple didn’t think of it themselves.

Rather than provide a technical overview of Audiobus, I’m more interested in the business model, and the potential case study it offers for future collaboration between app designers and content developers:

1. Audiobus is a collaboration between the developers behind two of the more successful audio apps, SoundPrism and Loopy HD

2. The developers have released an SDK for easier integration of new and existing 3rd party apps

3. There were a reasonable number of existing apps compatible with Audiobus when it launched, and more are being added all the time

4. As one reviewer has commented, buying the Audiobus app actually increases the useability (and therefore the value) of other apps

5. The key to Audiobus is providing a common standard for handling and processing audio recordings created in different apps

At least one app developer abandoned a new design for audio sharing between his own apps when he realised that the Audiobus solution would offer much more flexibility.

When combined with apps like AudioShare (a document management and conversion tool for audio files) and SoundCloud (THE social media platform for audio), Audiobus is really helping to open up and foster a multi-function environment for musicians through content compatibility, integration, sharing, exporting and collaboration.

Frustratingly, I sometimes struggle to figure out which of my iOS apps I need to use to open, edit and share text files, pdf documents, spreadsheets and slides. All too often, files suffer from incompatible formats, fonts, layout and graphics. If only we could have the same level of collaboration for e-books and productivity tools that Audiobus has fostered for music apps!

Outside of a small circle of friends, there’s only connections…

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"A Dance to the Music of Time" is an epic tale of friendships and relationships

How many true friends can a person really have? Friends you would go to the cinema with, and who would walk out with you if you didn’t like the film? Friends whom you would invite to stay at your home for the holidays? Friends who would tell you when you had made a fool of yourself, but not hold it against you? Friends from whom you would borrow money or to whom you would lend money?

Social networking makes it all too easy to connect with people we’ve barely or never met. Instead of investing our time and effort in cultivating meaningful and lasting friendships, social media encourages us to “collect” as many virtual friends as possible, and we spend increasing amounts of time in vicarious “sharing” – but how many of these “connections” can we actually count on as our friends?

The question occurred to me as I read the First Movement of Anthony Powell’s “A Dance to the Music of Time”, a literary tour de force situated somewhere between Marcel Proust’s “À la recherche du temps perdu” and Evelyn Waugh’s sequence of novels from “Decline and Fall” to the “Sword of Honour” trilogy.

At the heart of Powell’s 12-novel saga is a group of four friends – Jenkins, the narrator, and his three contemporaries from school – Templer, Stringham and Widmerpool. As we follow their adventures over a 50-year period, we discover the interweaving relationships and often tangential connections that run through their lives. We also witness the subtle change in relationships between the main characters – especially the ebb and flow of their individual circumstances as they fall out of favour and lose contact with one another for years at a time. The reflective and considered format of the novel allows us to see that as in real life, there are periods when the friends positively dislike each other and are frequently disappointed by their personal shortcomings and irritated by their annoying habits.

Powell’s epic work of fiction reminds us that even among our strongest and most enduring friendships, there can be episodes of absolute dislike, as well as times of empathy, loyalty and support; and of course, being only human, our opinions and views of our friends can change over time. Powell’s perspective also confirms that most of the people we encounter in social and professional situations are mere acquaintances. We must surely recognize that our personal friendships are each valued on their own merits, and we enjoy different friendships for different reasons – we do not simply have a homogenous group of “connections” that are all exactly the same. There is nothing wrong with being part of well-connected and inter-related networks, but we must guard against reducing all these relationships to a single dimension.

Unfortunately, most social networking platforms operate on a binary structure where we are forced to make simplistic choices of either “friend” or “unfriend”, “like” or “unlike”, “follow” or “unfollow”. And there is something rather materialistic and incredibly narcissistic in the way that the number of “likes”, “follows” and “shares” we collect on-line is not only representative of our popularity, but it is somehow an indication of how fabulous a friend we really are.

Unlike the real world, these on-line platforms do not recognize the subtle dynamics of our true friendships, nor do they acknowledge that we value each of our friendships for the different experiences that we draw from them. We also have different friends with whom we enjoy doing different things, and we probably don’t introduce all our friends to one another (and certainly not at the same time).

Of course, younger generations who have grown up with social media may have no qualms about the reductionist nature of social networking, and the inherent opportunity it affords them to “connect” with as many different people as they can. But for someone like myself who is quite happy to count fewer than a score of people as my true friends, I relish the quality of my friendships, not the quantity.

Apologies to Phil Ochs for (mis-)appropriating his song title.